Christian debt-consolidation loans are almost identical to normal debt-relief programs, in that both types help debtors pay their debts. However, Christian debt-consolidation programs are based on the principles found within the Bible, giving debtors a heightened sense of confidence in their services.
Preventing the Accumulation of Debt
The best way to prevent the need for a Christian debt-consolidation loan is to manage your money according to biblical principles. There are many verses in the Bible that speak against debt, including Romans 13:8 ("Owe no man any thing, but to love one another: for he that loveth one another fulfilleth the law") and Proverbs 22:7 ("The rich ruleth over the poor, and the borrower is servant to the lender"), among others. Basically, do not get into debt in the first place, and you will have solved your debt problem before it even starts.
Function of Debt Consolidation Loans
The purpose of a Christian debt-consolidation loan is to pay off debts so you can save money and make only one monthly payment. Christian debt-consolidation loans are usually offered at a much lower interest rate than credit cards and other loans. As a result, the debtor makes payments to the Christian debt-consolidation company. These payments are generally smaller, and since the interest rates are lower, the debtor pays off the debt much quicker and cheaper than he would have had he kept the other debts.
Taking out a loan to pay off your current debt is a good idea if you have learned a lesson about managing money effectively. Christian financial expert Dave Ramsey says that a Christian debt-consolidation loan will only enable a person to go further into debt if she has not changed her spending habits. Instead, Ramsey says a person must change the way she spends her money before she considers looking at Christian debt-consolidation loans.
Benefits of Christian Debt Relief
A Christian debt-consolidation loan is a great way to get yourself in line. Working with Christian debt counselors can help you gain better control of your finances. Also, creditors are often much more willing to work with you if they see you are working with a Christian debt-consolidation company. They may give you a break on your monthly payment or your interest rate.
Check Out the Company
Many debt-consolidation companies take on the name "Christian" so more people will be attracted to their services. Just because a company has the word "Christian" in its name, however, does not mean that it follows biblical principles. Before signing up with any Christian debt-consolidation loan company, research it online and through the Better Business Bureau. If there are several complaints about the company, find a different one.
Some mortgage companies also look at debt-consolidation loans the same way they look at bankruptcies. If you are considering purchasing a home in the near future, consider other alternatives to help ensure a decent credit score.
Chad Hagy is based in southern California and he has been a full-time freelance writer since 2006. He has a Bachelor of Arts in English with a specialization in writing from the University of Michigan and his articles have been published on several prominent websites including eHow and others.